That Toyota RAV4 you’ve been thinking about buying?
You may have to wait a while.
Toyota announced temporary production cuts in vehicles in Japan and North America on Thursday due to the global shortage of semiconductor chips.
The move is expected to further limit the availability of new Toyota cars and trucks, some of which were already in short supply.
Which vehicles are limited?
“A little bit of everything,” said Toyota spokesman Scott Vazin in an email.
The production slowdown affects all of the company’s North American plants, including plants in Indiana and Kentucky, and is expected to last through September and “likely” through October, Vazin said.
A shortage of new vehicles caused by the chip shortage has spread to the auto industry, driving used car prices to record highs and making currently leased vehicles more valuable. In some cases, used cars go up in value, shocking analysts who have long recognized that cars are a depreciating asset.
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Toyota expects to cut production by 60,000 to 90,000 vehicles in August and by 80,000 in September.
Toyota has 14 plants in North America, including 10 in the United States, with a total of more than 176,000 employees. The automaker’s U.S. plants produced approximately 1 million of the 2.1 million vehicles the company sold in America in 2020.
The Toyota brand had just 20 days of supplies of new vehicles at the end of July, while the company’s luxury brand Lexus had 23 days of supplies, according to Cox Automotive, which includes Kelley Blue Book and Autograder. The national average was 32 days.
“Toyota has been at the low or low end of inventory for many months,” Autotrader analyst Michelle Krebs said in an email. “Lexus was the lowest of the luxury brands.”
One reason for this is that Toyota vehicles were particularly popular during the pandemic, she said.
Toyota has already taken steps to cut production in certain situations, including producing the full-size Tundra pickup at its San Antonio, Texas facility, said Chris Reynolds, general manager of Toyota North America.
“In the long term, we will continue to work with our suppliers to better understand the global supply chain and minimize its impact,” said Reynolds, chief administrative officer of corporate resources.
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